Are Dividend Aristocrats Owned by Buf...
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John Murphy
Are Dividend Aristocrats Owned by Buffett best for the Long Term?
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The Standard & Poor’s 500 Index (NYSE: SPY) is down three weeks in a row.  For some, that is a sign of a bear market looming.  The Standard & Poor’s 500 Index is now off for the last week, month, and quarter of market action (chart below).  A bullish sign, though, is that legendary investor Warren Buffett just bought a car dealership, which would be the first to suffer in an economic downturn.

Long term investors should take the bullish outlook of “The Oracle of Omaha” and invest in the “Dividend Aristocrat” stocks Buffett owns, such as Coca-Cola (NYSE: KO), ExxonMobil (NYSE: XOM), and Wal-Mart (NYSE: WMT).

There is much to like about Coca-Cola, ExxonMobil, and Wal-mart, other than each being a major holding of Warren Buffett.  Each is an industry leader.  The management, business plan model, and financial structure of each is sound.  All are also Dividend Aristocrats.

A Dividend Aristocrat is a publicly owned company that has increased the amount of its dividend annually for at least the past 25 years.

Paying a dividend is like having no doubt: it is a formidable sign of financial puissance in a company.  To not only pay a dividend, but increase it yearly is an even more powerful indicator.  To do it over such as long period of time is a very bullish sign for the financial strength of a company and the commitment of its management to reward all shareholders.

The dividend yield of Coca-Cola, ExxonMobil, and Wal-Mart is also higher than that for the average member of the Standard & Poor’s 500 Index.

For the long term investor that provides a strong foundation, no matter what happens in the stock market.  The income component of each stock will reward the shareholders.  Every time the amount of the dividend is raised, those owning the stock get a raise.  Doing this in companies with Buffett as a major shareholder is a secure way to ride out turmoil in the equity markets!





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